• In an exclusive interview with Correio, Eduardo Pedreira talks about OR’s new development in Bahia

    DATE: 02/08/2024

    Published by: OR

    OR wants to talk about development at Praia do Buracão

    Project will generate more than a thousand jobs over the next three years

    Why does part of the population always see entrepreneurs as someone who wants to take advantage of others and make a predatory profit? To answer this question, Eduardo Pedreira, CEO of OR, the developer of the Novonor group – the former Odebrecht – turns to Brazil’s founding. “Our country was created to be a colony of exploitation,” he says, adding that this left the idea in people’s minds that here you have to hurt someone to make money. This worldview, coupled with ignorance and other interests, explains the opposition that has been shown to the real estate project that OR is going to implement on Praia do Buracão, in Rio Vermelho, Pedreira believes. In this exclusive interview, the first to deal with the development, he highlights the social concern of the developer, which will increase accessibility to the beach for the general public, and the economic impact of the work, which will generate more than a thousand direct and indirect jobs, boosted by the income effect. Outside the walls of the development, the company promises to invest more than R$4 million in urban improvements. “We’ve made a diagnosis, we’ve created a concept, we’re ready to present our project, but we’re open to talking,” he says.

    Credit Ana Albuquerque CORREIO

    Who he is

    He has a degree in Civil Engineering from the Federal University of Bahia UFBA and a postgraduate degree in corporate finance and project management from the Getúlio Vargas Foundation FGV. He has 23 years of experience in real estate development, having actively participated in the development of more than 20 real estate projects. In 2020, he became president of OR, the real estate arm of the Novonor group, which operates in São Paulo, Bahia and Pernambuco.

    How do you see the Brazilian economy?

    From 2014 to 2024, we lived through a period of putting the country’s house in order and now we have a unique opportunity for the next ten years, because these are the last ten years of the demographic boom. We’ve always talked about a young country, but we only have this period to take advantage of this reality, in which you also have the rise in commodities, which support a large part of our trade balance – with oil, minerals and agriculture. The government needs to take action to contain the public deficit. But I believe that we are going to experience a process that will be very good for society, because we started the year with the lowest unemployment rate since 2020 and it is falling. We’re seeing a drop in the Selic rate, which is something very important for the population as a whole. You see, unemployment is reduced and more people start to have an income. When you lower interest rates, it makes it possible to offer cheaper credit. The current government is very focused on the economic class.

    What’s missing?

    I think we need to look more at sustainable initiatives. There are already many, such as here in Salvador, where we have a Green IPTU, which allows people to reduce their tax payments. It’s very important because it makes people feel in their pockets how good it is to be sustainable. I’ll say it again, we need to look ahead ten years, invest in infrastructure, in the social part, because it’s an opportunity we can’t miss.

    How does OR fit into these perspectives?

    We always look for projects that add value to the place and community in which we operate. There’s no way we can develop anything that isn’t sustainable, we don’t do projects that don’t benefit the society in which we operate. If you ask me, we benefited the needy community around us, we identified people who were on the margins, we brought an NGO to work within the community association and it gave these people crafts to become artisans. But that wasn’t all, to make the most of the waste generated, they turned it into decorative objects and we bought it ourselves and encouraged them to sell it elsewhere. We thought about transferring knowledge and technology so that these people could use it and survive on their own. When we buy land, the first diagnosis we make is social. Next door, when it rained, the water was up to 1.5 meters high. What did we do? We had to make a macro-drain for ourselves and we connected it to the community’s macro-drain and it never flooded again.

    The enterprise cannot be thought of as an island.

    Exactly. We’re going to launch new projects over the next few years, and some have been discussed a lot, which is very good for us. It’s important to have discussion in the democratic rule of law. One of them, at Praia do Buracão, I won’t call controversial, but there is a desire from society in some respects. When we did the project, we followed all the steps of social diagnosis, traffic and environmental impact, but there were still some controversies. The first one was, ‘well, the building will bring in more inhabitants and the street can’t cope’. We did a traffic impact study, there are only 47 apartments. Then they said, ‘there are three towers’. No, there are two, one with 16 floors and the other with 15, with a distance between them of 40 meters. And there’s an interesting point: the Master Plan (Urban Development Plan, PDDU) states that where there are degenerated areas, the developer can develop, as long as it brings social benefits. What are we going to do? The entire Rua do Barro Vermelho and the beach will be redeveloped. There will be more landscaping, street furniture, on the beach, we will restore the lighting, put in two boardwalks, two lifeguard posts. For the street vendors who work in the area, we’re going to put up structures, improve access and put up viewpoints. All of this has been built together with the City Hall so that the development’s infrastructure will benefit society and bring greater benefits.

    What is the truth when someone says that the towers will shade the beach and affect the entire ecosystem?

    When you have a building on a beachfront, you have to be very careful about shading. In this case, the legislation says that in areas of degeneration you don’t have to look at this point, but we did. What did we do? Studies. We brought in a specialist from USP (University of São Paulo), Professor Roberta Kronka (a professor at USP’s Faculty of Architecture and Urbanism), who assessed the movement of shade in all seasons. In summer, fall and spring, there is no shade. In winter, we have 7% shade, which doesn’t prevent bathing, not least because it’s a period when we already have a lot of clouds. You won’t see much shade from those buildings in that area. If you go there now in the summer, you won’t see the shadow of any of the buildings that already exist. Even though we didn’t need to, we did all these studies and put them there.

    What about the marine ecosystem?

    That also worried us. We thought, is there going to be any change? We commissioned an environmental report and the result was zero changes. Then they also talked about a greater volume of cars because there would be more apartments. They said there would be 200 or 300 more apartments, but there will be 47. In this urbanization process that we’re going to carry out, we’re going to change the entire floor, leaving the asphalt, which is hot, and putting in an interlocking floor. We’re going to rearrange it in such a way that you’ll have 50 more parking spaces. The urban planning project we’re going to implement covers 6,600 square meters. Until today, there was one side presenting one position. Now, we’re putting forward our side, with all the benefits we’re bringing to society. We’re being so careful that the distance between one tower and another is 40 meters. And why this distance? So as not to have that effect that exists in Rio de Janeiro, where the towers are all very close together on the waterfront, causing heat. There is a much deeper concept and another side that needs to be looked at.

    Why have you been silent all this time?

    We hadn’t said anything yet because there is a licensing process. When you do a project like this, it takes two years of studies in a wide variety of areas. We’ve discussed traffic impacts, shading, the environment… The silence comes because we’re in the process of discussing and formatting the project. Now we’re ready to show what benefits it will bring to society. Look at the situation on the beach, which doesn’t even have any lighting. We’re going to redevelop it so that people can go there at night to play sports. We couldn’t say anything because we were in the process of discussing it. Imagine, I could say something and then have to backtrack. Today I have the confidence to show what we’re going to do. This kind of discussion is very healthy and we’re ready to take part in it. This is the moment when we want to present the benefits to society. We’re talking about a concept of the common good, of urbanism.

    Do you already have an estimate for the generation of jobs and income?

    We’re going to generate around a thousand direct and indirect jobs and income from this project. When you do a project like this, the effect is very significant, because construction is very democratic in terms of generating benefits. You employ everyone, from someone who wants to start their working life to a doctor in Law or Advertising, then there’s the furniture salesman, the company that supplies the bricks… It involves an extremely broad chain and we’re not even talking about the impact on Tourism, because it will make our city even more attractive. It’s an important discussion, but let’s deal with it without untruths, the technical points about shading and the environment have not been explored in depth. We have to talk in depth and think about the common good. Some people are against spikes because they think verticalization is bad, but what would happen if we limited the construction of buildings to two storeys? The world’s population is growing and if housing can’t be vertical, it will occupy a much larger horizontal area. The environment wouldn’t be able to withstand such sideways growth. What needs to be discussed is whether verticalization is being done in a responsible and sustainable way. We have to assess whether it preserves the environment. When it causes an impact, it needs to be corrected and bring a greater benefit. There has to be concern about climate issues, bringing social and urban benefits.

    Why is it so important for OR to invest in the Buracão area, what does it have that you wouldn’t find elsewhere in the city?

    First of all, Rio Vermelho has great cultural value and we know what we can do for the area by regenerating it. I’m doing a high-end development, sold to private individuals, but this development will bring a series of improvements to the area. If you ask me if it burdens the project, the answer is yes.

    How much will be invested in the outside area?

    Around R$4 million, maybe even more because of the landscaping, the replacement of 3,500 meters of sidewalk. It’s a beautiful area that is attractive for people to live in, with a very strong cultural appeal. What we’ve done is taken two deteriorated buildings and redeveloped the area, with benefits for the surrounding community. This was the choice. There’s no such thing as closing the beach, it’s going to be more open than it already is. For example, today the beach is divided by an area of rocks, and those on one side can’t access the other. What are we going to do? We’re going to retreat our area to build a public deck that will connect the two areas. We’re even concerned about these kinds of details.

    What do you think is fueling the opposition of certain groups to the project?

    The first thing that I think motivates this is the fact that there are older buildings, when you put up two new towers, you lose part of your view – not all, but part. But we’re in an urban center, the city is going to develop. But I think the main issue is the lack of in-depth information on the subject. You have to be careful because it ends up being a tremendous untruth and creates a collective unconscious, which people think is true and don’t delve into. It’s complicated just to think about it. That’s why I say again that this is an extremely pertinent discussion and we need to bring the facts into the conversation.

    Generally speaking, why do you think people view entrepreneurial initiatives with such suspicion and negativity?

    We were originally an exploitation colony, unlike the United States, which was a development colony. I think this has ingrained a concept in the minds of us Brazilians that will only change over a long period of time. We need to understand that development has to be sustainable, generate wealth and that this wealth needs to be shared responsibly with society. But we can’t look at the entrepreneur in the real estate market or any other economic sector and see a devastator or a usurer. We have created a very negative concept of profit, and the Church used to preach back then that it was a sin. It’s the fruit of work, it’s the division of wealth for the betterment of society. Now, profit that comes from exploitation and takes wealth away, that was a problem. We need to understand that it’s healthy to generate wealth, as long as it’s shared with society. I think this is changing over time. We need to be proud of our entrepreneurs. Nobody goes into business to make a loss and then I ask you, what happens when a company closes? The less well-off lose their jobs. My greatest satisfaction is doing sustainable projects and giving people opportunities to grow, seeing someone who has never worked come in as a helper and leave as an engineer. We have to change this mentality. Entrepreneurs are fundamental to society, but they need to have a sustainable vision.

    Project includes the construction of a viewpoint

    Looking at it from the other side, is our real estate market already mature in terms of this vision of sustainability?

    I don’t think so. In Brazil, there are some regional differences. I’m from Salvador and I’m proud to be here, but when you get to the Southeast, you notice a slightly greater evolution in this entrepreneurial mentality. People value attracting development more. I understand that we’re moving forward and this conversation we’re having is important to revisit these concepts. We are moving forward, but we need to accelerate. Society is demanding and often loses patience. That’s why it looks at the entrepreneur and confuses him with the speculator.

    This is a very strong view.

    Unfortunately, for many people, real estate development is synonymous with speculation. It’s a lack of knowledge that leads to ignorance. The real estate speculator buys the land and doesn’t put it to any social use – that’s speculation. If Odebrecht bought that land and kept it in a drawer for ten years, that would be speculation, but it’s not like that. OR bought it and automatically started an economic development cycle, with a series of studies and projects. I buy the land and start the development process. This difference needs to be made because they are totally different roles. Then people talk on the radio about ‘real estate speculators’. No, they are developers, who work towards development.

    What is the forecast for the start and completion of construction?

    We should launch this year and finish within 36 months of the launch. So it will be three years of conversations with society and investments. Today we’re sure of the benefits we’ll bring, but of course we’re going to present them and talk about them.

    Are you open to changing anything, if necessary?

    Of course, anything that benefits society will be discussed. We’ve made a diagnosis, we’ve created a concept, we’re ready to present our project, but we’re open to talking. We’re going to talk to associations, neighbors… In every project we do, the first step is to ask permission, we’re going to talk to everyone. We want to show that we are strictly following the law, which is the city’s Master Plan, but we are going much further.

    It’s the concept of social license.

    Exactly. We don’t want to buy a piece of land, fence it off, legalize it and say, ‘We’re in charge here’. What we want is for it to benefit the city. Let’s talk about it. Look, we see urban planners who are against verticalization, but I ask you, what is the alternative? I want to listen to them. The population is growing. We have to find alternatives.

    What do you expect from the real estate market in 2024?

    We have a falling interest rate, down to 9%. This will force the real estate market to become cheaper. Unemployment is falling, we’re going to have more people with incomes. A few million Brazilians will enter the credit market. What’s more, the government is focusing more on Band 1 consumers, who are the lowest-income segment and need public support to buy their own homes. We’re going to have a better year than 2023 and the next three years will be much better than the last three. We have a housing deficit of 6 million homes and 95% of that is in the economic segment, which needs it the most. We’re going to see growth throughout the country. Our expectation is that the projects will be increasingly sustainable.

    What about Salvador?

    Salvador is a city that sells between 5,000 and 7,000 units a year. We’ve seen the latest programs that City Hall has launched to stimulate the development of the central region of the city, with Renova Salvador, tax incentives for real estate… This is all very important because in the center, we have our culture, our history. These are measures that encourage the private sector to invest and consequently preserve the area. I see a series of initiatives that are attracting entrepreneurs there, there is an incentive for occupation. In Orla and Paralela, which are two important vectors of growth, we should have new projects that will stimulate important growth, driven by these municipal programs, by Minha Casa Minha Vida and by the reduction in unemployment and the Selic rate.


    Interview originally published by Correio on February 3rd. Access here:

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